The Rich Do Not Distort Democracy as Much as Other Groups

One of the greatest social concerns in the popular press today is rising inequality. I have been a skeptic that citizens of the United States are becoming more unequal in consumption, which is the kind of material equality or inequality that counts the most. People work to live. They do not live to work.

But some have expressed a political rather than simply material concern about inequality. Even if consumption is converging between the rich and middle class, greater inequality in income allows the rich to have more political influence. For purposes of this blog post, let us assume that the rich have substantial influence in politics beyond their numbers. (Note that this assumption ignores that the rich are more often targets of opprobrium in the rhetoric of modern democracy than any other income class).  I am also skeptical that this additional influence is as great a problem for democracy or at least that it is a problem for which the cure is not worse than the disease.

First, influence in a democracy is largely a zero-sum game. If the rich don’t have influence, other groups will fill the void. It is an illusion that the average citizen is likely to gain more substantial influence even if the rich have less.  As Ilya Somin and others have  noted, most citizens are rationally ignorant of politics. Except in a crisis they rarely apply sustained and consistent pressure on policy.  Reducing the influence of the rich will not directly give more influence to the masses.

Thus,  the question is not whether the rich have more influence on the political process but whether the influence is more problematic than the influence of the groups that would gain more disproportionate leverage if the influence of the rich were diminished.

One argument in favor of the relative influence of the rich is that it is relatively ideologically balanced. There is a debate about whether the rich contribute more money to Republicans or  to Democrats. That debate can occur because the support is relatively equally balanced. It is not surprising that wealth does not have a strong partisan valence. People become wealthy in many different ways and through different experiences of the world.  The titans of Silicon Valley do not have the same political views as the wizards of finance or the captains of manufacturing.  The interests of these businesses conflict as well, making it difficulty for the wealthy to simply skew regulation in their own favor.

But there can be no debate about other groups who vie with the rich for the most outsize influence on politics. Journalists and academics–the gatekeepers of public discourse– skew more Democratic and to the left than the bluest of the blue states. Even lawyers, whom Alexis De Toqueville rightly saw as the real aristocrats of democratic society by virtue of their ability to influence politics, including the  judiciary, lean pretty heavily to the left.  Thus, reducing the influence of the rich would likely lead to less ideological balanced influence from groups with disproportionate leverage.

One counterargument might be that other organized groups who claim to help poorer individuals would also gain more influence.  But, of course, the question of whether such groups actually advance the interests of the less well-off is itself a vexed question. There is a reason to be skeptical about the effects of the influence of public sector unions on the prospects of the less well-off. As I have observed,  teacher unions have blocked improvement of public education—the single social policy that can do the most for social mobility.

In a subsequent post, I will discuss why trying to reduce income inequality would likely have bad effects, including increasing the inequality in influence on government.

Reader Discussion

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on October 05, 2017 at 15:19:26 pm

I think Schumpeter is the go to source on this. Capitalism, Socialism, and Democracy in particular. He argued that capitalism would fail not from the factors Marx posited, but at the hands of the intellectual classes that capitalism makes possible.

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Craig Pirrong
on October 05, 2017 at 16:32:12 pm

Yet there may be a distinct difference between that which the rich seek to influence and that which the lower orders seek to influence.

Both may be problematical.

Put another way:

The influence of the rich may conduce to a certain financial corruption; the influence of certain *interest* groups may lead to moral (no, not religious usage) corruption.

Somin is right,at best, many folks are rationally ignorant of politics; at worst, they are passionately ignorant.

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on October 06, 2017 at 15:19:49 pm

What about research by Gilens and Page, and others, that show that the acts of the legislature correspond highly to the desires of the very wealthy and not at all to the desires of the average person?

Has their conclusion been disputed to satisfaction?

I tend to view the influence of the wealthy in terms of the inherent system of checks and balances. The wealthy, the sellers, need protection from the public, the buyers. The buyers want to influence the sellers to get more product for less money and the sellers want to maximize profits at the expense of the buyers. We do these things through legislation. The public buyers remove elected officials who give too much power to the wealthy sellers. The wealthy sellers influence elections and buy influence to prevent legislation from giving away too much of their wealth to the public buyers.

If the check by the public was not in place, the wealthy would centralize power and use it to extract undue wealth from the public.

If the check on the wealthy was not in place, the public would drive government to socialism very quickly.

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Scott Amorian

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